VietNamNet Bridge – The Ministry of Construction has said no new cement projects will come into production in 2015-2016 as authorities have ordered project owners to refrain from building new ones due to the current oversupply, an official said.

The ministry this year will continue to review cement projects and eliminate all those deem ineligible from the master plan, and will delay seven others until early 2017, said a leader from the ministry’s Building Materials Department.

Last year, the ministry scrutinized projects being constructed in the 2012-2015 period, and decided to scrap nine projects producing clinker with a daily capacity of less than 2,500 tons.

Cement consumption in the country has been lower than expected due to the stagnant property market with numerous housing and construction projects remaining stalled.

Before 2010, Vietnam had to import 3.5-4.5 million tons of cement a year to meet the domestic demand, leading many investors to rush into the cement industry.

Now supply has outpaced demand as the total capacity of the country’s cement industry is around 70 million tons but annual consumption only reached 61 million tons, with 48 million tons for domestic use.

This year, another five cement factories are expected to start operation, adding an additional output of seven million tons per year.

According to the Vietnam Cement Association, as the Government no longer offers guarantees to cement investors to borrow from foreign lenders as it did before, it is difficult for them to carry out a cement project, which normally costs hundreds of millions of U.S. dollars.

Recently, authorities of the northern province of Quang Ninh have asked the Ministry of Construction to stop expanding two cement projects, Thang Long 2 and Ha Long in the province, for fear that they will cause pollution at the World Heritage-listed Halong Bay.

The first stage of Thang Long factory started operation in 2008 with an annual capacity of 2.3 million tons while Halong factory’s first stage was commissioned in 2010 with 5,500 tons of clinker a day.

Considering the provincial suggestion, the Ministry of Construction has not yet allowed the investors to expand the two cement projects.    

Source: SGT